Source The economics Times
India has further tightened its regulatory grip on cryptocurrency platforms, mandating enhanced identity verification measures such as live selfies and geo-tagging for users, according to sources familiar with the development. The move is aimed at strengthening oversight of digital asset transactions and curbing illicit activities including money laundering, terror financing, and tax evasion.
Under the new compliance framework, crypto exchanges operating in India will be required to conduct real-time identity checks during user onboarding and periodic re-verification. This includes capturing live selfies to prevent impersonation and using geo-tagging to confirm a user’s physical location within permitted jurisdictions. Platforms must also ensure that the data collected aligns with existing Know Your Customer (KYC) and Anti-Money Laundering (AML) norms.
Regulators believe the measures will close loopholes that have allowed anonymous or proxy trading in the past. Officials said the enhanced checks are in line with India’s broader push for greater transparency in the fast-growing digital asset ecosystem, which has seen a surge in retail participation over the last few years.
Crypto exchanges have been asked to update their systems to comply with the new requirements within a stipulated timeframe. Failure to do so could invite penalties, restrictions on operations, or even suspension of services. Some platforms have already begun notifying users about upcoming changes to verification processes.
Industry players, while acknowledging the need for regulatory clarity, have raised concerns about user experience and data privacy. They have urged authorities to ensure that compliance requirements are implemented in a phased manner and with robust safeguards to protect sensitive personal information.
India does not yet recognize cryptocurrencies as legal tender, but it has steadily expanded its regulatory framework. Crypto transactions are subject to taxation, and platforms are required to register with relevant authorities and report suspicious activities.
With the introduction of live selfie verification and geo-tagging, the government has signaled its intent to maintain strict oversight of the sector while allowing regulated innovation. Observers say the latest move could reshape how crypto platforms operate in India and may influence regulatory approaches in other emerging markets as well.
